Carbon neutrality, or having a net zero carbon footprint, refers to achieving net zero carbon emissions by balancing a measured amount of carbon released with an equivalent amount sequestered or offset, or buying enough carbon credits to make up the difference. It is used in the context of carbon dioxide releasing processes associated with transportation, energy production, and industrial processes such as production of carbon neutral fuel.

The carbon neutrality concept may be extended to include other greenhouse gases (GHG) measured in terms of their carbon dioxide equivalence (CO2e) —the impact a GHG has on the atmosphere expressed in the equivalent amount of CO2. The term "climate neutral" reflects the broader inclusiveness of other greenhouse gases in climate change, even if CO2 is the most abundant, encompassing other greenhouse gases regulated by the Kyoto Protocol, namely: methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC), perfluorocarbons (PFC), and sulphur hexafluoride (SF6). Both terms are used interchangeably throughout this article.

The best practice for organizations and individuals seeking carbon neutral status entails reducing and/or avoiding carbon emissions first so that only unavoidable emissions are offset. Carbon neutral status is commonly achieved in two ways:

Balancing carbon dioxide released into the atmosphere from burning fossil fuels, with renewable energy that creates a similar amount of useful energy, so that the carbon emissions are compensated, or alternatively using only renewable energies that don't produce any carbon dioxide (also called a post-carbon economy).[1]

Carbon, or climate, neutrality is usually achieved by combining the following steps (although these may vary depending whether the strategy is implemented by individuals, companies, organizations, cities, regions, or countries):

In the case of individuals, decision-making is likely to be straightforward, but for more complex set-ups, it usually requires political leadership at the highest level and wide popular agreement that the effort is worth making.

Counting and analyzing the emissions that need to be eliminated, and the options for doing so, is the most crucial step in the cycle as it enables setting the priorities for action – from the products purchased to energy use and transport – and to start monitoring progress. This can be achieved through a GHG inventory that aims at answering questions such as:

Which operations, activities, units should be included?

Which sources should be included (see section Direct and indirect emissions)?

Who is responsible for which emissions?

Which gases should be included?

For individuals, carbon calculators simplify compiling an inventory. Typically they measure electricity consumption in kWh, the amount and type of fuel used to heat water and warm the house, and how many kilometres an individual drives, flies and rides in different vehicles. Individuals may also set various limits of the system they are concerned with, e.g. personal GHG emissions, household emissions, or the company they work for.
There are plenty of carbon calculators available online, which vary significantly in their usefulness and the parameters they measure. Some, for example, factor in only cars, aircraft and household energy use. Others cover household waste or leisure interests as well. In some circumstances, actually going beyond carbon neutral (usually after a certain length of time taken to reach carbon breakeven) is an objective.

In starting to work towards climate neutrality, businesses and local administrations can make use of an environmental (or sustainability) management system or EMS established by the international standard ISO 14001 (developed by the International Organization for Standardization). Another EMS framework is EMAS, the European Eco Management and Audit Scheme, used by numerous companies throughout the EU. Many local authorities apply the management system to certain sectors of their administration or certify their whole operations.

One of the strongest arguments for reducing GHG emissions is that it will often save money. Energy prices across the world are rising, making it harder to afford to travel, heat and light homes and factories, and keep a modern economy ticking over. So it is both common sense and sensible for the climate to use energy as sparingly as possible. Examples of possible actions to reduce GHG emissions are:

Limiting energy usage and emissions from transportation (walking, using bicycles or public transport, avoiding flying, using low-energy vehicles), as well as from buildings, equipment, animals and processes.

Obtaining electricity and other energy from a renewable energy source, either directly by generating it (installing solar panels on the roof for example) or by selecting an approved green energy provider, and by using low-carbon alternative fuels such as sustainable biofuels.

The use of Carbon offsets aims to neutralize a certain volume of GHG emissions by funding projects which should cause an equivalent reduction of GHG emissions somewhere else, such as tree planting. Under the premise “First reduce what you can, then offset the remainder”, offsetting can be done by supporting a responsible carbon project, or by buying carbon offsets or carbon credits.

Carbon offsetting is also a tool for severals local authorities in the world.[5]

Offsetting is sometimes seen as a charged and contentious issue. For example, James Hansen describes offsets as "modern day indulgences, sold to an increasingly carbon-conscious public to absolve their climate sins."

This phase includes evaluation of the results and compilation of a list of suggested improvements, with results documented and reported, so that experience gained of what does (and does not) work is shared with those who can put it to good use.
Finally, with all that completed, the cycle starts all over again, only this time incorporating the lessons learnt. Science and technology move on, regulations become tighter, the standards people demand go up. So the second cycle will go further than the first, and the process will continue, each successive phase building on and improving on what went before.

Being carbon neutral is increasingly seen as good corporate or state social responsibility and a growing list of corporations and states are announcing dates for when they intend to become fully neutral. Events such as the G8 Summit[6] and organizations like the World Bank[7] are also using offset schemes to become carbon neutral. Artists like The Rolling Stones[8] and Pink Floyd[9] have made albums or tours carbon neutral.

To be considered carbon neutral, an organization must reduce its carbon footprint to zero. Determining what to include in the carbon footprint depends upon the organization and the standards they are following.

Generally, direct emissions sources must be reduced and offset completely, while indirect emissions from purchased electricity can be reduced with renewable energy purchases.

Direct emissions include all pollution from manufacturing, company owned vehicles and reimbursed travel, livestock and any other source that is directly controlled by the owner. Indirect emissions include all emissions that result from the use or purchase of a product. For instance, the direct emissions of an airline are all the jet fuel that is burned, while the indirect emissions include manufacture and disposal of airplanes, all the electricity used to operate the airline's office, and the daily emissions from employee travel to and from work. In another example, the power company has a direct emission of greenhouse gas, while the office that purchases it considers it an indirect emission.

Carbon neutral fuels are those that neither contribute to nor reduce the amount of carbon into the atmosphere. Before an agency can certify an organization or individual as carbon neutral, it is important to specify whether indirect emissions are included in the Carbon Footprint calculation.[10] Most Voluntary Carbon neutral certifiers such as Standard Carbon in the US, require both direct and indirect sources to be reduced and offset. As an example, for an organization to be certified carbon neutral by Standard Carbon, it must offset all direct and indirect emissions from travel by 1 lb CO2e per passenger mile, and all non-electricity direct emissions 100%.[11] Indirect electrical purchases must be equalized either with offsets, or renewable energy purchase. This standard differs slightly from the widely used World Resource Institute and may be easier to calculate and apply.

Much of the confusion in carbon neutral standards can be attributed to the number of voluntary carbon standards which are available. For organizations looking at which carbon offsets to purchase, knowing which standards are robust, credible in permanent is vital in choosing the right carbon offsets and projects to get involved in. Some of the main standards in the voluntary market include; CEB VER Standard, The Voluntary Carbon Standard, The Gold Standard and The California Climate Action Registry. In addition companies can purchase Certified Emission Reductions (CERs) which result from mitigated carbon emissions from UNFCCC approved projects for voluntary purposes. There are various resources available however to help companies navigate the often complex carbon offsetting standards maze.[12]

The concept of shared resources also reduces the volume of carbon a particular organization has to offset, with all upstream and downstream emissions the responsibility of other organizations or individuals. If all organizations and individuals were involved then this would not result in any double accounting.

Regarding terminology in UK and Ireland, in December 2011 the Advertising Standards Authority (in an ASA decision which was upheld by its Independent Reviewer, Sir Hayden Phillips) controversially ruled that no manufactured product can be marketed as "zero carbon", because carbon was inevitably emitted during its manufacture. This decision was made in relation to a solar panel system whose embodied carbon was repaid during 1.2 years of use and it appears to mean that no buildings or manufactured products can legitimately be described as zero carbon in its jurisdiction.[13]

Being carbon neutral is increasingly seen as good corporate or state social responsibility and a growing list of corporations, cities and states are announcing dates for when they intend to become fully neutral.

The original Climate Neutral Network was an Oregon-based non-profit organization founded by Sue Hall and incorporated in 1999 to persuade companies that being climate neutral was potentially cost saving as well as environmentally sustainable. It developed both the Climate Neutral Certification and Climate Cool brand name with key stakeholders such as the US EPA, The Nature Conservancy, Rocky Mountain Institute, Conservation International, and the World Resources Institute and succeeded in enrolling the 2002 Winter Olympics to compensate for its associated greenhouse gas emissions.[14] The non-profit's web site as of March 2011, lists the organization as closing its doors and plans to continue the Climate Cool upon transfer to a new non-profit organization, unknown at this time.[15] Interestingly, the for-profit consulting firm, Climate Neutral Business Network, lists the same Sue Hall as CEO and lists many of the same companies who were participants in the original Climate Neutral Network, as consulting clients.[16]

Few companies have actually attained Climate Neutral Certification, applying to a rigorous review process and establishing that they have achieved absolute net zero or better impact on the world's climate. Shaklee Corporation announced it became the first Climate Neutral certified company in April 2000.[17] Climate Neutral Business Network states that it certified Dave Matthews Band's concert tour as Climate Neutral. The Christian Science Monitor criticized the use of NativeEnergy. a for-profit company that sells offsets credits to businesses and celebrities like Dave Matthews.[18]

Events such as the G8 Summit and organizations like the World Bank are also using offset schemes to become carbon neutral. Artists like The Rolling Stones and Pink Floyd have made albums or tours carbon neutral, while Live Earth says that its seven concerts held on 7 July 2007 were the largest carbon neutral public event in history.

The Vancouver 2010 Olympic and Paralympic Winter Games were the first carbon neutral Games in history.[34]

Buildings are the largest single contributor to the production of greenhouse gases. The American Institute of Architects 2030 Commitment is a voluntary program for AIA member firms and other entities in the built environment that asks these organizations to pledge to design all their buildings to be carbon neutral by 2030.[35]

In 2010, architectural firm HOK worked with energy and daylighting consultant The Weidt Group to design a 170,735-square-foot (15,861.8 m2) net zero carbon emissions Class A office building prototype in St. Louis, Missouri, U.S.[36]

The Central American nation of Costa Rica aims to be fully carbon neutral by 2021.[38] In 2004, 46.7% of Costa Rica's primary energy came from renewable sources,[39] while 94% of its electricity was generated from hydroelectric power, wind farms and geothermal energy in 2006.[40] A 3.5% tax on gasoline in the country is used for payments to compensate landowners for growing trees and protecting forests and its government is making further plans for reducing emissions from transport, farming and industry.

Samsø island in Denmark is the largest carbon-neutral settlement on the planet, with a population of 4200, based on wind-generated electricity and biomass-based district heating. They currently generate extra wind power and export the electricity to compensate for petro-fueled vehicles. There are future hopes of using electric or biofuel vehicles.[41][42][43]

Another nation to pledge carbon neutrality is New Zealand. Its Carbon Neutral Public Sector Initiative aimed to offset the greenhouse gas emissions of an initial group of six governmental agencies by 2012. Unavoidable emissions would be offset, primarily through indigenous forest regeneration projects on conservation land. All 34 public service agencies also needed to have emission reduction plans in place. The Carbon Neutral Public Service programme was discontinued in March 2009.[44]

On April 19, 2007, Prime Minister Jens Stoltenberg announced to the Labour Party annual congress that Norway's greenhouse gas emissions would be cut by 10 percent more than its Kyoto commitment by 2012, and that the government had agreed to achieve emission cuts of 30% by 2020. He also proposed that Norway should become carbon neutral by 2050, and called upon other rich countries to do likewise.[45] This carbon neutrality would be achieved partly by carbon offsetting, a proposal criticised by Greenpeace, who also called on Norway to take responsibility for the 500m tonnes of emissions caused by its exports of oil and gas.[46]World Wildlife Fund Norway also believes that the purchase of carbon offsets is unacceptable, saying 'it is a political stillbirth to believe that China will quietly accept that Norway will buy climate quotas abroad'.[47] The Norwegian environmental activist Bellona Foundation believes that the prime minister was forced to act due to pressure from anti-European Union members of the coalition government, and called the announcement 'visions without content'.[47] In January 2008 the Norwegian government went a step further and declared a goal of being carbon neutral by 2030. But the government has not been specific about any plans to reduce emissions at home; the plan is based on buying carbon offsets from other countries, and very little has actually been done to reduce Norway's emissions, apart from a very successful policy for electric vehicles[48]

Iceland is also moving towards climate neutrality. Over 99% of electricity production and almost 80% of total energy production comes from hydropower and geothermal. No other nation uses such a high proportion of renewable energy resources. In February 2008, Costa Rica, Iceland, New Zealand and Norway were the first four countries to join the Climate Neutral Network, an initiative led by the United Nations Environment Programme (UNEP) to catalyze global action towards low carbon economies and societies.

In July 2007, Vatican City announced a plan to become the first carbon-neutral state in the world, following the politics of the Pope to eliminate global warming. The goal would be reached through the donation of the Vatican Climate Forest in Hungary. The forest is to be sized to offset the year's carbon dioxide emissions.[49] However, no trees have actually been planted as of 2008.[50] The company KlimaFa is no longer in existence and hasn't fulfilled its promises.[51] In November 2008, the city state also installed and put into operation 2,400 solar panels on the roof of the Paul VI Centre audience hall.[52] In 2013, Vatican City became the world's first carbon neutral country [53][54][55][56][57]

In June 2011, the Canadian Province of British Columbia announced they had officially become the first provincial/state jurisdiction in North America to achieve carbon neutrality in public sector operations:[58] every school, hospital, university, Crown corporation, and government office measured, reported and purchased carbon offsets on all their 2010 Greenhouse Gas emissions as required under legislation.[59] Local Governments across B.C. are also beginning to declare Carbon Neutrality.[60]

Many initiatives seek to assist individuals, businesses and states in reducing their carbon footprint or achieving climate neutrality. These include website neutralization projects like CO2Stats and, the similar European initiative CO2 neutral website as well as the Climate Neutral Network, Caring for Climate, and Together campaign.

Although there is currently no international certification scheme for carbon or climate neutrality, some countries have established national certification schemes. Examples include Norwegian Eco-Lighthouse Program and the Australian government's National Carbon Offset Standard (NCOS).

Climate Neutral Certification was established and trademarked originally through the Climate Neutral Network, an Oregon-based non-profit organization, not to be confused with the UNEP's Climate Neutral Network. Applications for certification are no longer being accepted according to the non-profit organization's web site, where the organization also states it is closing its doors.[63] The first three companies certified as Climate Neutral were Shaklee Corporation, Interface, Inc., and Saunders Hotels.[64][not in citation given] Stakeholders in developing and supporting the Climate Neutral Certification are listed as The Nature Conservancy, Conservation International, Rocky Mountain Institute, and the U.S EPA.[65] What is unclear is whether the Climate Neutral certification will be continued by the for-profit consulting firm, Climate Neutral Business Network, or another non-profit organization in the future.

Climate Neutral Network also promoted, trademarked, and licensed the brand Climate Cool, for products certified by the organization's Environmental Review Panel and determined to achieve net zero climate impact, by reducing and offsetting associated emissions.[66] The organization's web site promises to transfer the Climate Cool branding to another non-profit organization, upon closing the current organization.